When to run a Pay-Per Click Advertising Campaign

Pay per Click is most effective for business to consumer companies but can also be quite effective for B2B as well. The measuring stick must be ROI. While B2C may have a larger volume of search, making lead generation easier, the revenue per conversion is likely far less than B2B. Businesses must factor in the potential revenue per lead. If you are selling greeting cards at $2.50 per sale, then Pay per Click is not for you.  If you are an orthodontist with a potential $4,000 to $5,000 per conversion, then Pay per click is highly effective. Better still, if you are an industrial supplier and a potential conversion is $10,000 to $100,000 or more, then just one lead can more than offset costs of advertising.

When it comes to Pay per Click advertising, I advise clients strickly based on the following:

1. How many leads do you need to convert 1 customer?

2. How much revenue is the average conversion worth?

3. What is your net profit per conversion?

After that information is gathered, we can walk backwards to a budget. What increase in profit do you want = how many conversions you need = how many leads you require = budget based on cost per click.

Easy Math if you look at it backwards, not so much if you look at it forward.

Again, Pay per click is not for everyone, but it sure pays off for the ones that work it properly.

Alex D.

3 comments to “When to run a Pay-Per Click Advertising Campaign”

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